[WestCoast]

Sure all countries are now connected no matter how you slice it. If you're a doom and gloom person the post just above you says it all "own gold". I own 0 gold now because I prefer to own a set of different currencies instead. You're right in your assessment I am not too worried about it right now by any means. If Europe really tanks we're all screwed so whatever is my opinion. Then again I am a bit riskier than most bc I am young, what's my alternative with excess capital? Buy bonds and guarantee a loss? Buy a home and lose my freedom? Buy... Pretty much left with equities. I am decent in my choices so I'll take my chances with the money I can afford to lose.

"if you have 10:1 odds on a legitimate 50/50 coin flip how much do you bet? As much as you can afford to lose."

[MikeCF]

What currencies are you in?

How do you deal with the pain of not having the mortgage interest tax deduction?

[Lothario]

(03-16-2012 06:33 PM)MikeCF Wrote:  

What currencies are you in?

How do you deal with the pain of not having the mortgage interest tax deduction?

Here is another Questions so you can answer 2 in 1.

I have about 25 grand saved that I want to pay off towards motgage loan on my house (Interest 3.5%) and a commercial property (Interest 5.8 %).

Should I pay off the high Interest property first ?

I know you might say ur binding yourself to an illiquid asset and Mortage Interest is a Tax deduction, I feel like no kind of Interest is good Interest and hate the feeling of a Loan, Hopefully by the end of next year , I will be debt free.

your thoughts westcoast ?

[WestCoast]

Sure.

This will be short because as mentioned I am gonna start gettig busy and won't be active on the forum starting next week for a while but pls hit me up over the next 2 days.

"interest tax break" this is an oxymoron to me. This means you get take off 35% basically. I live in a rent controlled apartment when I moved in rent has gone up 35%... My rent has gone up 1.1% annually... I am making cash.

The "tax break" is just an illiquid trap in my view. No different from donating clothes. Sure u have off 35% but your cost basis is 100% net loss 6500 bips that's murder, I have no plans to buy. I ran a discounted cash flow analysis on the HIGHEST accretion homes in all areas new York and SF. All in, there are only 2 time periods where the IRR was positive (the 75-85) range and on top of that it only worked in those 2 cities! 50K turning into 500K over 40 years sounds like a real return. It is not. Calculate your upkeep cost, upgrades to home to maintain value etc.

Now that I have bashed home ownership, what do u do if u have a home? Yes lothario pay that shit off man. Unless u got a way to bank in 5.8% risk free u are losing $$ on a like for like basis. Make sense?

Let's say you're locked up illiquid, unless you are using the home to slay more puss I see no reason not to kick and go into a rent controlled facility. Make it "fancy" as possible and kick during the summer when it looks the flyest (more $$$). Again unless you can make more than the net interest payment risk free pay that shit down. Sure 5.8 % is really say 4%... Find me 4% risk free? Good luck. Saving is sometimes OPPORTUNITY cost cutting.

For fun, say you miss out on a $2K deduction. That mathematically means you actually lost $4K unless your home gained valued. I take the risk averse version of sticking to rent increases of 1% ... Inflation is 2% I am richer.

Good luck peeps feel free to pm me if the situation is different or post up here

[MikeCF]

How much would you need to quit work?

What country would you expatriate to?

[WestCoast]

Sure personal opinion. I don't believe in quitting work. Even if u gave me $1billion I would still do something, just would need to enjoy it.

With that said I believe roughly 350-400K and I'd kick it off with a big move.

What country? Yet to be seen, but I get the feeling somewhere in Latin America just because I honestly love to dance (yes I am still a man) and its cool. Pick up a chill job and shack it up in a decent place and have a good time.

[Tigre]

(03-16-2012 06:45 PM)Lothario Wrote:  

Here is another Questions so you can answer 2 in 1.

I have about 25 grand saved that I want to pay off towards motgage loan on my house (Interest 3.5%) and a commercial property (Interest 5.8 %).

Should I pay off the high Interest property first ?

I know you might say ur binding yourself to an illiquid asset and Mortage Interest is a Tax deduction, I feel like no kind of Interest is good Interest and hate the feeling of a Loan, Hopefully by the end of next year , I will be debt free.

your thoughts westcoast ?

Westcoast has given some good advice so far on the forum. But I strongly disagree with that last answer.

Here are some questions that will get you closer to a good answer:

How stable and reliable is your monthly income?

Why don't you like interest payments? Do you spend any time worrying about not being able to meet your mortgage payment? Or is it that you think you could be making better use of the money?

How much is left to pay on either loan? For a guy building net worth by real estate, there is a psychological win involved in getting one property free and clear and then using those funds freed up to increase the payment on the other loan.

How are those assets performing? What's the current income from the commercial property? Will it be cashflow positive any time soon? What's your outlook for capital gain in that market?

How is your net worth / portfolio divided? Is it all property, or diversified and balanced?

In general, it's a good idea to reduce all risk to the point where you can sleep easily at night.

You could argue you're "making cash" by getting a rent payment below market value. But you could also argue you're pissing away 100% of rent money each month. You're paying the owner's loan and not your own.

From looking at another thread, Lothario is in the medical field. Doctors and lawyers are some of the professions most susceptible to taking large losses when they choose high impact investments.

You need to look at psychological factors and goals in this analysis. You also need to consider cashflow that can be generated from the assets. In the case of the family home, you look at cash not spent by avoiding need to pay rent.

When building wealth, there's more than one way to do it. Westcoast's approach is just one style. And it won't be the right choice for everyone.

[WestCoast]

I understand what your saying and still strongly disagree, primarily because housing is a value trap unless you bought a home in SF or NYC in ~1975-1985 time period. Then again I am a shady shady person and I rent out the place to other people if i end up leaving for a month etc. But even if you don't want to be shady and rent out for market rate while paying below market rate the only way i would own a home is if i didn't pay anything on it or i was very good at fixing up homes and buying dirt cheap "fixer uppers", 95% of a people are not cut out for this.

Basically, the math works out that there are always other vehicles to make more $$$ than buying a home for the same level of risk... Docs and Lawyers get taken for a ride by financial people all day every day, unfortunate, but i am not gonna give that kinda crap advise.

Anyway on that note it's St. Pattys day and after last night i am forcing myself to pound sand and hit up 10+ ppl today. If you've got a legitimate reason to own a home that your paying 5% on in interest please show me the math i think you'll be shocked.

[Parlay44]

3. Black market cash is by far the most lucrative investment. For example in Venezuela it is pegged at 4, but the black market is 8. Clearly dangerous as fuck but my visit to Caracas Was profitable because of this, bring down 5K and you can do a vacation for 2 weeks for free!

My father used to sell dollars in the street in Bulgaria in the 80's when it was still communist. They'd give double what the bank would exchange for a dollar. Reason being ...back then you could only get goods like TVs, blue jeans, certain foreign liquor in special stores that only took dollars.

When I was 15 I exchanged $20 on the street into Bulgarian Levs. I couldn't spend the whole thing in a month there.

WestCoast how do you feel about buying up the New Iraqi Dinar? Is it a scam?

[WestCoast]

You are preaching 2 the choir, no offense but not many peeps can pull the fwd contracts but if u did cool.... Iraqui dinar is making money off death.. Do you

[WestCoast]

Realized I did not answer 1 question. I own various latin currencies as well... Sole purpose is shit hit the fan scenario. Again if u are into white blondes buy up euros.. Do you

[WestCoast]

Need to do a quick update on this. Hopefully u guys have followed my investing advice because your PA should be up =)

Anyway I frequently get asked about lending club so here goes:
1. Buy A and C rated notes in my view. (C because it should be a smoother curve they have been doing a bad job pricing risk into C's which explains the large vertical stripe on their graphical depiction of performance)
2. Only invest $25 per note because you want massive diversification.
3. I would NOT recommend this if you're not in at least ~1,000 notes. Seriously MASSIVE diversification = LOWER RISK. This is because diversification in "indexes" stocks is not the same as notes. A stock is an individual Company (thousands of people working together) a "note" is a SINGLE PERSON. Try to take risk off on giving $25 to everyone trying upgrade their rice rocket or whatever the hell they are buying.
4. Don't get lazy, reinvest your interest that comes in monthly, put that in your calendar and if you're a true baller and are exposed to ~$50K worth, then u may want to just sign up for a more automated policy they offer
5. Don't pull out monthly cash flow! Let it compound monthly its a huge difference to annual compound or quarterly compound u get from investing in stocks/ getting quarterly dividends.

Best of luck. Stay strong and long in stocks till may, when my friends start telling me to buy FB stock i'll be PEACING THE HELL OUT. But hope u guys have been in there in tech stocks man, has been a scarily profitable run my friends.

[pazzesco]

(04-21-2012 10:44 PM)WestCoast Wrote:  

Need to do a quick update on this. Hopefully u guys have followed my investing advice because your PA should be up =)

Anyway I frequently get asked about lending club so here goes:
1. Buy A and C rated notes in my view. (C because it should be a smoother curve they have been doing a bad job pricing risk into C's which explains the large vertical stripe on their graphical depiction of performance)
2. Only invest $25 per note because you want massive diversification.
3. I would NOT recommend this if you're not in at least ~1,000 notes. Seriously MASSIVE diversification = LOWER RISK. This is because diversification in "indexes" stocks is not the same as notes. A stock is an individual Company (thousands of people working together) a "note" is a SINGLE PERSON. Try to take risk off on giving $25 to everyone trying upgrade their rice rocket or whatever the hell they are buying.
4. Don't get lazy, reinvest your interest that comes in monthly, put that in your calendar and if you're a true baller and are exposed to ~$50K worth, then u may want to just sign up for a more automated policy they offer
5. Don't pull out monthly cash flow! Let it compound monthly its a huge difference to annual compound or quarterly compound u get from investing in stocks/ getting quarterly dividends.

Best of luck. Stay strong and long in stocks till may, when my friends start telling me to buy FB stock i'll be PEACING THE HELL OUT. But hope u guys have been in there in tech stocks man, has been a scarily profitable run my friends.

i was one of the pms you got about this, thanks!

[nomadicdude]

(04-21-2012 10:44 PM)WestCoast Wrote:  

Need to do a quick update on this. Hopefully u guys have followed my investing advice because your PA should be up =)

Anyway I frequently get asked about lending club so here goes:
1. Buy A and C rated notes in my view. (C because it should be a smoother curve they have been doing a bad job pricing risk into C's which explains the large vertical stripe on their graphical depiction of performance)
2. Only invest $25 per note because you want massive diversification.
3. I would NOT recommend this if you're not in at least ~1,000 notes. Seriously MASSIVE diversification = LOWER RISK. This is because diversification in "indexes" stocks is not the same as notes. A stock is an individual Company (thousands of people working together) a "note" is a SINGLE PERSON. Try to take risk off on giving $25 to everyone trying upgrade their rice rocket or whatever the hell they are buying.
4. Don't get lazy, reinvest your interest that comes in monthly, put that in your calendar and if you're a true baller and are exposed to ~$50K worth, then u may want to just sign up for a more automated policy they offer
5. Don't pull out monthly cash flow! Let it compound monthly its a huge difference to annual compound or quarterly compound u get from investing in stocks/ getting quarterly dividends.

Best of luck. Stay strong and long in stocks till may, when my friends start telling me to buy FB stock i'll be PEACING THE HELL OUT. But hope u guys have been in there in tech stocks man, has been a scarily profitable run my friends.

This is legit. I have over 1,000 notes in Lending Club and I only do A and B notes. Don't be fooled by their ads showing that lower grade notes (C/D/F/etc) get 10% plus percent returns. It is only true maybe for the first 12 months then those notes have MASSIVE defaults. You can confirm this by running some numbers here: http://www.lendstats.com/loansearch/lc/l...o1=2&ex1=1

So far I have a 6.2% return which is fine with me. The money would otherwise be in savings earning less than 1% or in stocks which are risky now, or bonds which also are either low yield or risky now. So I am totally a big fan of Lending Club.

I also have 5k in Prosper.com but I don't think it is as good as Lending Club. I've been with Prosper for over three years and it just seems its losing market share to LC big time and I somewhat worry about whether it will survive long-term.

[WestCoast]

Yeah, I guess I should clarify my advice on the A and C can still be classified as personal opinion. If you're more conservative 6 is good. I am rather more of a take advantage of every opportunity kinda guy and the C's are incorrectly priced (lots of crap on the yield curve to explain this) but yeah, if u can get an account with a lt of notes I don't know why u wldnt. Unless you don't like making $$$

[xsplat]

(04-21-2012 10:44 PM)WestCoast Wrote:  

Anyway I frequently get asked about lending club so here goes:

That looks interesting, but unfortunately it seems to only be for US residents or those incorporated in the US.

[cybermutiny]

Westcoast, you keep pushing TIPS as a safe investment for money but do you realize that the TIPS "inflation rate" is based on government numbers, which do not include the price of food or energy? And furthermore, do people on this board actually believe the government inflation rate (or any government economic number for that matter)?

[WestCoast]

Yes.

Inflation rate given out by the government has historically been wrong. They have overeststed it multiple times, so it's actually better than sticking in your CD, want 2%+ or regular 1%? 100bps change. That's a lot.

Personally I do not own any tips, I am younger and take more risks and am relatively good at knowing what to buy.

If I could have a name for this thread it would be "Control emotions, alternate investment vehicles, delete advise you hear from experts" and for the real computer nerds that means "control, alt, delete" please reset your investment philosophy.

The "government is evil" and "USA is great" are both flawed in some way. If u were scared back in dec 2011 you lost out on one of the biggest market rallies. If you were "long in 08" you got burned. Need to change the way we think to make that $&&

[cybermutiny]

(04-24-2012 07:35 AM)WestCoast Wrote:  

Yes.

Inflation rate given out by the government has historically been wrong. They have overeststed it multiple times, so it's actually better than sticking in your CD, want 2%+ or regular 1%? 100bps change. That's a lot.

Personally I do not own any tips, I am younger and take more risks and am relatively good at knowing what to buy.

If I could have a name for this thread it would be "Control emotions, alternate investment vehicles, delete advise you hear from experts" and for the real computer nerds that means "control, alt, delete" please reset your investment philosophy.

The "government is evil" and "USA is great" are both flawed in some way. If u were scared back in dec 2011 you lost out on one of the biggest market rallies. If you were "long in 08" you got burned. Need to change the way we think to make that $&&

Agreed.

And generally, when everyone (even the man on the street) believes in one trade, it's a good idea to take the opposite.

[WestCoast]

Bumping this thread to touch on one subject i saw some seriously bad advise on which was "retirement planning". I know this is a "blue pill" kinda thing but please hear me out on the below at minimum for your personal net worth.


Get the Company match but don't do it like Yahoo Finance says.
What do i mean by this? I mean max out your Roth 401K with a match or a Roth IRA match if your company offers it. I don't care if you're not interested in "retiring at 59" nor am I. But here goes, you can basically avoid taxes and get cash.

Roth 401K or Roth IRA is better regardless of tax bracket exit in my opinion for one LARGE relatively unknown reason to most which is liquidity. Lets say you get a 6% match, say u put in $2.5K and company matches exactly $2.5K (6% of your salary) that is $5K, 2.5 from you 2.5 from company. As soon as you switch jobs roll this over into a Roth IRA/Roth 401K immediately (don't keep it at your employer).

The rub is that you can pull out the ENTIRE principal tax free with no 10% penalty. So even if you're a "the world is gonna be at 1% rates for life" well you're a fool not to earn 100% from the company... for free.. liquid... with zero penalties.

Second piece of advise I have is for higher net worth cats. As soon as you clear $50K in networth in retirement 401K or Roth, you should be paying $0 is fees. If you're unwilling to do the work and find one (cough even vanguard does this) then you're losing thousands of dollars over time. If you truly believe your mutual fund is "better than the rest" I will happily prove that the 1% fee breaks you in half over the course of just 3 years.

With that said hope you guys take that match into a tax upfront account and stack cash in that fashion, who wants free liquid money? Sign me up.

Finally as a quick update:
Hope you all bought up those reits (10% return 10% yield on REM, 19% return AGNC and 15% yield)
AAPL + 41%

Anywho if you must know i am shaving off a bit on AAPL before the print and I'll be shaving off AGNC as soon as it goes Ex dividend. Make it rain! Never lose girls chasing cash, but try to balance keeping your health while making that $$!

[WestCoast]

(03-17-2012 07:05 PM)Parlay44 Wrote:  

3. Black market cash is by far the most lucrative investment. For example in Venezuela it is pegged at 4, but the black market is 8. Clearly dangerous as fuck but my visit to Caracas Was profitable because of this, bring down 5K and you can do a vacation for 2 weeks for free!

My father used to sell dollars in the street in Bulgaria in the 80's when it was still communist. They'd give double what the bank would exchange for a dollar. Reason being ...back then you could only get goods like TVs, blue jeans, certain foreign liquor in special stores that only took dollars.

When I was 15 I exchanged $20 on the street into Bulgarian Levs. I couldn't spend the whole thing in a month there.

WestCoast how do you feel about buying up the New Iraqi Dinar? Is it a scam?

Wow i realized i never fully answered this my bad! To be honest i wouldnt be picking it up because if you want to take a serious currency risk my answer is take a small bet on the next country to enter the Euro zone. This is highly speculative. Basically you can do similar to what you did at Bulgaria/Poland etc because if they enter the zone there will be massive changes in pricing dynamics. You could take a SERIOUS bet and buy a small home ($10K USD) and if that currency flips you could 4x your profit in a place like Poland.

I'm one greedy mother fucker, so if i had the capital to take such a risk I would double down get a place you'd be willing to relocate to if shit hits the fan (Ie: has hot girls) and buy something there. So worst case u have a spot to pull girls.

Note: I realize this looks like it contradicts my previous statements on houses but it really doesn't. I would never advise buying a home without pure cash nor would I ever buy a home in USA due to the excruciatingly high cost of upkeep and upgrades to keep the value there.

[T and A Man]

You're giving advice on how to make big $$$, yet you don't have $10k capital to risk on a 400% play?

[Kona]

(06-13-2012 10:13 PM)WestCoast Wrote:  

(03-17-2012 07:05 PM)Parlay44 Wrote:  

3. Black market cash is by far the most lucrative investment.

I'm one greedy mother fucker,

Can you guys talk a little more about this Black Market Cash, please?

It sounds interesting.

Aloha!

[chyamor]

West, what are your thoughts about euro and Greece election. I came across this article

http://finance.yahoo.com/news/caution-gr...00419.html

We believe there are four likely outcomes to these elections, with the highest probability of a Euro-negative outcome this weekend. They are:
SCENARIO #1: New Democracy wins elections and has parliamentary majority (> 151 votes) – EUR BULLISH – 10%
SCENARIO #2: New Democracy wins elections but does not have majority – EUR BEARISH (least bearish outcome) – 45%
SCENARIO #3: Syriza wins elections but does not have majority – EUR BEARISH (increasingly bearish outcome) – 40%
SCENARIO #4: Syriza wins elections and has parliamentary majority – EUR BEARISH (most bearish outcome) – 5%
In light of these expected outcomes, we find it most likely that the elections will not yield the most bullish outcome (scenario #1), but instead, falling somewhere between the least bearish and moderately bearish outcomes (scenario #2, #3). We have derived these probabilities from recent poll figures as well as commentaries from citizens and reporters in Greece.


I have traded fx on a very small scale ($2-$3k) mainly due to never having enough money to withstand the swings thus stopping out my account. I get my yearly bonus this September where I will be able to found my account about 15k.

I am expecting a shock drop then a huge upswing once people pretend the problem child is behind them. I expect this same issue to recycle with Spain and Italy down the road eventually causing the Euro to only have 3-4 countries.

I am hoping for a stalemate election thus allowing me to build up as much $$$ as possible. Yes I know this is a huge risk but I can afford to role the dice. (single, decent job, very little debt, etc)

[WestCoast]

(06-15-2012 03:00 AM)T and A Man Wrote:  

You're giving advice on how to make big $$$, yet you don't have $10k capital to risk on a 400% play?

I understand the indirect lash out you're making. But I'll ignore it and answer anyway.

10K for a 400% return must account for the lock up and chance of failure. If I had 10K to make such a play that would equate to 3% liquid net worth (ie: 333K liquid which implies a net worth of half mil+ which I do not have at mid twenties) of course this is my risk profile. I have stated on here that I'm in my mid 20's work on the street and luckily have already met a few guys on here who know I have cash/work in the field. I created this thread to help people make more money, if you're interested in that feel free to PM me.

If you must know why I can give such advise I can tell you straight up that or my age group I'm in the top 5% no doubt